People say life insurance should cover 10 times your income, but as a financial adviser I can tell you that isn't always enough

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I’ve had life insurance coverage in place since my wife and I
had our first child, but I’ve added to our coverage several times
as our family has grown. These days,
I have around $2.5 million in term life insurance coverage
my wife and kids, which is probably more than they could ever need
if I should suddenly pass away.

Then again, there’s a lot to think about and make sure life
insurance covers, and there’s really no “perfect” formula to
how much life insurance coverage you should buy
 anyway. I also
know for a fact my family would never think I had “too much”
coverage for their needs.

I’m also 100% certain the common wisdom to purchase 10 times
your income in life insurance coverage is leaving families at risk.
There are a myriad of reasons 10 times your income — or $100,000
in coverage for every $10,000 in salary you earn each year — may
not even be close to enough.

Here’s everything you should think about as you decide whether
or not to follow this popular advice.

Your income matters, but so do your expenses

term life insurance
is mostly intended to replace your income
once you’re gone, there’s a lot more to think about other than the
size of your paycheck. You also need to consider how much debt your
family has, including how they might pay it off if you were to pass
away before your time.

If your family has a large mortgage, several car loans, credit
card debt, and even student loans, for example, it’s highly
possible having just 10 times your income in coverage won’t be
enough. Even if you earn six figures and buy
$1 million in term life insurance coverage
 as a result, this
amount could disappear in a hurry once you start thinking over all
the liabilities it needs to cover.

Your spouse may need to stop working

reason to buy more life insurance
than you probably need is the
simple fact that life may change once you’re gone. If your spouse
has a job they love that brings in a nice income now, that doesn’t
mean this situation will stay the same if you passed away.

It’s highly possible your spouse will need to take some time off
to grieve, and it’s also possible they’ll want to cut down on work
hours or even stop working all together once they face life alone
— especially if you have kids.

Life insurance should replace your income for sure, but don’t
forget that it may need to fill in the gaps if your spouse or
partner faces a drop in income for any reason. They may desperately
want to stay home, but
how much life insurance you have
may make that decision for

Policygenius can help you compare life insurance policies to find
the right coverage for you, at the right price »

Have kids? Make sure to plan for college

It’s easy to think you don’t need a ton of life insurance
your kids are young
, but you have to remember that kids don’t
stay little forever! Daycare bills will eventually be replaced with
huge bills for sports and after-school activities.

And the bills don’t stop once they reach college. Considering
the high costs of higher education, you may want to consider
whether you want enough life insurance to pay
for all or part of your children’s higher education

Your kids could always borrow the money for school, but giving
them a tuition-free degree is something you would never regret.
Fortunately, having enough life insurance can make this dream a

There are some things you just can’t plan for

Also remember that there are
some life circumstances
that nobody sees coming. Maybe your
entire family is healthy and happy now, but who knows what could
happen five or ten years from now.

Having plenty of life insurance can help your family out if your
spouse or partner gets sick and cannot work, or even if one of your
kids winds up requiring expensive surgery or pricey long-term

You can plan for a lot, but you just can’t plan for everything.
Life insurance can be there to cover any surprise expenses your
family might face, no matter what they are.

Life insurance is affordable, so there’s no excuse

Buying 10 times your income in life insurance may be common
wisdom, but I tend to believe this advice is outdated. Term life
is so affordable
that it hardly makes sense to go without
enough coverage to replace your income and pay off all your debts
— all while accounting for life’s many “what ifs.”

Since term life insurance is so affordable, there’s really no
excuse to avoid buying enough coverage to help you sleep great at
night. Remember that your family will never wish you had less
coverage if you pass away — they will either be happy with what
they have or desperately wish you would have bought more coverage
while you had the chance.

You have the opportunity to leave a legacy behind, but you also
have the opportunity to leave your family broke and struggling to
get by. This is one decision where you won’t get a second chance,
so make sure to choose wisely.

can help you compare life insurance policies to find the right
coverage for you, at the right price »

Jeff Rose is an entrepreneur disguised as a financial adviser,
author, and blogger. Jeff is an Iraqi combat veteran having served
in the Army National Guard for nine years, including a 17-month
deployment to Iraq in 2005. He’s best known for his award-winning
blog and
book, “Soldier of Finance: Take Charge of Your
Money and Invest in Your Future
.” He’s also the founder
of Wealth
Hacker Labs
, a movement to teach accelerated wealth-building
strategies to future generations.  

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Source: FS – All – Economy – News
People say life insurance should cover 10 times your income, but as a financial adviser I can tell you that isn't always enough